Wall Street heavy hitters haven’t poured back into the market just yet, with volumes still low a week after Labor Day. And the summer’s strong market momentum has failed to extend into September so far.
The holiday-shortened week marked the S&P 500’s worst stretch since June and the market could certainly experience more near-term selling since all three major U.S. indexes still trade near their records. Pullbacks and corrections are healthy aspects of well-functioning markets and many analysts and traders think we are overdue for a dip.
The rough start to the month follows disappointing August jobs data that points to increasing Delta variant worries. Plus, some Wall Street analysts think the U.S. economic comeback may have already peaked, with strained global supply chains making matters worse.
All that said, the Fed is poised to keep its core interest rate at rock-bottom levels for at least a while longer and even when it does raise rates, investors will be left chasing returns in equities for the foreseeable future. Along with low interest rates, the overall corporate earnings picture, and the S&P 500 in particular, is highly impressive even in the face of the current economic and market concerns.
On top of that, attempting to time the market is extremely difficult, which means investors should attempt to stay as exposed as possible. The last year and a half highlighted the importance of both taking profits periodically, while staying in the game.
With this in mind, let’s dive into how investors can use this Zacks screener to find highly-ranked stocks trading for under $10 a share to consider buying in September…
One dollar or less used to be the common threshold for what we call “penny stocks.” Today, the SEC has expanded penny stocks to securities that trade for less than $5 a share. Many investors avoid these stocks because they are speculative in nature.
Meanwhile, penny stocks often trade infrequently and hold wide bid/ask spreads. These stocks also carry many other traits that, in many cases, cause excessive volatility. With that said, some penny stocks perform incredibly well, which helps them remain attractive.
Stocks Under $10
Moving on, let’s briefly discuss the next class of cheap stocks. Stocks that trade in the $5 to $10 range are generally less risky than their penny stock counterparts. Investors might be more likely to have heard of these companies or seen the tickers. They are, however, still inherently more speculative than many other higher-priced stocks.
Investors can obviously find winning stocks for under $10 if they are extremely selective. So today, we narrowed the list of thousands of these more speculative stocks down to a more manageable group of $10 and under stocks that might help boost your portfolio.
• Price less than or equal to $10
• Volume greater than or equal to 1,000,000
• Zacks Rank less than or equal to 2
(No Holds, Sells or Strong Sells.)
• Average Broker Rating less than or equal to 3.5
(Average Broker Rating of a Hold or Better.)
• # of Analysts in Rating greater than or equal to 2
(Minimum of at least two analysts covering the stock.)
• % Change F1 Earnings Estimate Revisions -- 12 Weeks greater than or equal to 0
(Preferably upward earnings estimate revisions, but definitely no downward revisions.)
Here are three of over 20 highly-ranked stocks trading under $10 a share that made it through the screen today…
MFA Financial, Inc. MFA
Greenlane Holdings, Inc. GNLN
Express, Inc. EXPR
Overall, all three of these stocks offer solid growth potential. Yet, it isn’t wise to pack your portfolio full of cheap, $10 or less stocks. Still, these stocks are certainly worth further investigation because grabbing a few of the top names from this list might bolster your returns. And let’s not forget that picking a few cheap stocks can also be quite fun.
Get the rest of the stocks on this list and start screening for the best stocks under $10 for yourself. And don't forget to backtest your strategy so you'll know how successful it's been before you put any of your money at risk.
Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance/.
Zacks' Super Screen
It's hard to believe, even for us at Zacks. But from 2000-2020, while the market gained +6.6% per year, our top stock-picking strategy averaged +52.4% per year.
How has that screen done lately? From 2016-2020, it more than tripled the market's +103.9% gain with a soaring +381.1% return.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MFA Financial, Inc. (MFA): Free Stock Analysis Report
Express, Inc. (EXPR): Free Stock Analysis Report
Greenlane Holdings, Inc. (GNLN): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research